A proposal by India's National Security Council to provide an additional filter besides the Foreign Investment Promotion Board for clearing overseas investment on security concerns has been put on the backburner, according to a Business Standard report.
Instead of a new outfit, proposals for foreign direct investment (FDI) that are considered ultra-sensitive on security grounds would be selectively dealt by secretaries of key ministries, including the home affairs and the department of industrial policy and promotion (DIPP), the paper said, quoting an unnamed source.
"We told them (NSC) that your apprehensions about terrorists and anti-social elements using the FDI route are not borne out by facts," the source said.
The NSC, an advisory body on national security issues reporting to the prime minister, had suggested that FDI proposals in sensitive sectors like defence, telecom, pharmaceuticals and airports be subjected to stringent entry norms. Its suggestion that the proposals must be vetted by a new high-powered body besides FIPB did not find favour with DIPP, which stoutly opposed the move, the source said.
At present, FDI proposals are cleared by the finance minister on the recommendations of the FIPB, which has representatives from different ministries. The DIPP, the nodal agency on FDI policy, had argued that creating another layer of clearance mechanism would result in delays.